[Olderguy]

Effective today, 3/8/2023, we are updating the terms of our Sales Partner Agreement to address instances of stacking and to prohibit Sales Partners from charging direct fees to merchants.

[Oxforddan]

Just read it. TLDR- they will deduct from your commission any direct fees you charge the merchant. If the merchant stacks they will clawback your commission.

[Olderguy]

Just read it. TLDR- they will deduct from your commission any direct fees you charge the merchant. If the merchant stacks they will clawback your commission.

The stacking issue applies if the ISO is aware (notify Credibly) or involved (a no no).

They can't penalize you if you don't know or aren't involved.

[Michael I]

The stacking issue applies if the ISO is aware (notify Credibly) or involved (a no no).

They can't penalize you if you don't know or aren't involved.

where does it say that ?

[Olderguy]

No Stacking. "Stacking" is the receipt of additional financing by a Referred Merchant immediately prior to, at same time or after such Referred Merchant has been funded by Credibly pursuant to a Working Capital Agreement, whether such additional financing is in the form of business loons, merchant cash advances {purchases of future payment receivables) or other forms of working capital or business financing. Stacking a breach of the terms of the Working Capital Agreement and significantly increases the risk of default.

Independent Sales Partner covenants and agrees that it:

1. shall immediately notify the relationship manager at Credibly in the event it becomes aware of any Stacking; and

2. shall not, directly or indirectly, solicit, offer, provide or broker, or otherwise facilitate the provision, offering, brokering or solicitation of Stacking ("Broker Facilitation").

[Oxforddan]

That says the broker cant facilitate it. It does not in fact say they wont penalize you if you are not involved. I have a feeling they will assume you did it whether its true or not.

[Oxforddan]

Does anyone know what the "stacking fee" they charge the client is? Hint hint it is absolutely massive and absurd.

[goldenhippo80]

Does anyone know what the "stacking fee" they charge the client is? Hint hint it is absolutely massive and absurd.

How much?

[Oxforddan]

I think its 10% of the contract amount. So if you fund a 500k deal with them the stacking fee is 50k. Even if the client never misses a payment.

[BR-Nightmare]

That says the broker cant facilitate it. It does not in fact say they wont penalize you if you are not involved. I have a feeling they will assume you did it whether its true or not.

The problem is if the Merchant admits to it, the broker will then call the Merchant a liar.

[Olderguy]

The problem is if the Merchant admits to it, the broker will then call the Merchant a liar.

They have to prove this:

shall not, directly or indirectly, solicit, offer, provide or broker, or otherwise facilitate the provision, offering, brokering or solicitation of Stacking ("Broker Facilitation").

[Oxforddan]

Steve, you have done this before. You know full well they don't have to prove ****. They can and will just claw back. Feel free to not believe me. Buyer beware.

[Olderguy]

Steve, you have done this before. You know full well they don't have to prove ****. They can and will just claw back. Feel free to not believe me. Buyer beware.

Yeah...but I thought all lenders were honest....and believe what you tell them...

[Oxforddan]

LOL. To be honest if you do real volume with them, and its an outlier I am sure they will be flexible. If you are like me and fund 2-3 deals a quarter with them it may be wise to place your deals elsewhere. I don't stack or double fund deals, but in this environment I am seeing more and more of my clients get "random" calls from other brokers after I fund them, which results in some of them having 2nds and 3rds in place.

[StellarCap]

LOL. To be honest if you do real volume with them, and its an outlier I am sure they will be flexible. If you are like me and fund 2-3 deals a quarter with them it may be wise to place your deals elsewhere. I don't stack or double fund deals, but in this environment I am seeing more and more of my clients get "random" calls from other brokers after I fund them, which results in some of them having 2nds and 3rds in place.

Why do you keep sending them deals in the first place?

Maybe you need better partners... smh..

[Oxforddan]

Why do you keep sending them deals in the first place?

Maybe you need better partners... smh..

Touche

[abfunders]

Okay, so everyone assumes that everyone else is assuming the worst. Jon at Credibly just called me after I signed the new agreements (I don't PSF anyway). I asked him, "But you're going to get stacked by Everest or Forward or whoever, how do you know that it wasn't me?"

Here's what he told me: If you stack, don't bring them back for a renewal, they have no way of knowing what happened. However, if the deal goes bad and the stack is there, they're not stupid enough to start a fight. They will ask the merchant: "Who offered the stack?" To figure out what happened truthfully they will ask for email chains to find out.

I somehow doubt that they will willy-nilly dock everyone and just start fights for no reason. They need to put their foot down, but we don't have to play these games. Just because YOU are a bad guy doesn't mean that EVERYONE is a bad guy. MCA companies are known for their due diligence and double-checking everything. This is a pretty easy one to prove/disprove.

Yeah, the merchant could lie, but that's where the email chains will help. Both sides can prove that as well. Nobody wants a lawsuit or a fight.

[closer129]

For funders we do need to be careful of the bad iso's that will stack and double fund a merchant just to make more money and doing things like this can help. I had an iso I fired that I asked him since you are oushing longer term deals and the merchant need smore money before the renewal is up what do you do he told me he will stack them. So if a funder starts seeing parterns that put this clause in of merchants not renewing because the iso is hiding that they stacked the merchant and have a lot files they see that even thou they paid back had stacked and ones that have issues stacked and they see the common denominator is the broker then that broker should pay back the commission and get fired.

If it is a good broker who funds alot of deals with the funder and renews them and they have a small percentage of deals going bad and stacking then the odds are you trust the iso and do not crawl back the commission unless it is under 30 days. There has to be trust on all sides in this industry between the funder and iso's and merchants. The problem is there to many bad apples in this space over the last few years it is hard to trust most people especially when it is a new relationship.

[FlexibleCapitalSolutions]

Okay, so everyone assumes that everyone else is assuming the worst. Jon at Credibly just called me after I signed the new agreements (I don't PSF anyway). I asked him, "But you're going to get stacked by Everest or Forward or whoever, how do you know that it wasn't me?"

Here's what he told me: If you stack, don't bring them back for a renewal, they have no way of knowing what happened. However, if the deal goes bad and the stack is there, they're not stupid enough to start a fight. They will ask the merchant: "Who offered the stack?" To figure out what happened truthfully they will ask for email chains to find out.

I somehow doubt that they will willy-nilly dock everyone and just start fights for no reason. They need to put their foot down, but we don't have to play these games. Just because YOU are a bad guy doesn't mean that EVERYONE is a bad guy. MCA companies are known for their due diligence and double-checking everything. This is a pretty easy one to prove/disprove.

Yeah, the merchant could lie, but that's where the email chains will help. Both sides can prove that as well. Nobody wants a lawsuit or a fight.

The potential scenario i imagine in my head is:

Assuming you do some volume with them

- You fund a deal and earn $5-10k commission
- later on some other broker submits statements to them for your merchant or the merchant tries to get a renewal, they see that the merchant stacked
- they could care less who stacked it, your the iso on record, they clawback commission or offset the clawback against pending commissions
- you call them and argue with them nothing gets resolved
- you speak to an attorney and he will charge you 5-10k to file the lawsuit.
- you decide its not worth it and you take the hit and move on.

[abfunders]

The potential scenario i imagine in my head is:

Assuming you do some volume with them

- You fund a deal and earn $5-10k commission
- later on some other broker submits statements to them for your merchant or the merchant tries to get a renewal, they see that the merchant stacked
- they could care less who stacked it, your the iso on record, they clawback commission or offset the clawback against pending commissions
- you call them and argue with them nothing gets resolved
- you speak to an attorney and he will charge you 5-10k to file the lawsuit.
- you decide its not worth it and you take the hit and move on.

Yes, that's the question. However, why would they do it that way? The places that aren't professional could do that. Brokers who aren't professional that don't pay commissions, they'll give excuses all day long why they didn't and never pay. However, a big firm has compliance and lawyers, and their own lawyers won't let them do something like "sue first, let them sue us to get it back." Especially when it's just so easy to trace and do your due diligence up-front. Credibly doesn't have a bad reputation, no reason to assume they'd ruin their name for that.

And of course, this new contracts helps Credibly reinforce their no-stack preferences. If you're afraid of this scenario, the ISO should create an email thread after funding congratulating the merchant and stating clearly, "DO NOT STACK, because here are the consequences."

On the flip-side, no-stack clauses for first positions keep merchants stuck behind "term" debt! There's a reason why MCAs came behind SBAs and 2nd stacks came around behind 1st positions. I prefer what Quikstone and PIRS and TMR do with add-ons. What do you want a merchant to do that took out $50k now *but qualified for $200k), and needs another $50k next week and Credibly won't give it to them because they already have a position?

[goatFunding]

I never promote or offer to stack a merchant I funded.. at the same time funders need to understand that not all stacking by the broker is evil... If the merchant will take a new deal with or with out me... shouldn't I, the broker who spent time and $ getting the guy in the door make the commission?
I will always work on getting the longest terms possible, to make the original funders deal less at risk... And I will usually call the funder and alert them..

Also.. as a broker I do not like this new policy for reasons mentioned above. at the time I understand them... 1.23 over 9 months paying 5 … its important not to get stacked.

[closer129]

I had reached out to an iso couple week ago to let him know that the merchant is ready for a renewal and he told me that the merchant stacked on us 2 weeks prior. He did not reach out to me to see if we can work something out to get the merchant funding or had the merchant wait a couple of weeks so she does not have to stack and he got her funded. When I got the updated statements to see that i called the merchant up to ask a couple of questions and asked her who get her the deal. She said the broker I always go to him for the funding. For credibily adding that stacking clause is not a bad idea for brokers like this to protect their company from bad brokers and over extending the merchant to the point that they default or paying back the deals.